New Homes vs. Foreclosure

New Homes Magazine wants to provide a home buyers a guide for buying a new home. Currently there are so many items to consider when purchasing a home, that sometimes things get lost and you can end up biting off a bit more than you can chew, if you don’t consider all the costs and opportunities.

Today I wanted to start off with comparing buying a new home, from a reputable home builder, versus buying a foreclosed home or even a short saled home in a segment titled “The Truth About Buying A Foreclosure”

For each foreclosure that turns out to be a “great buy” there are tens, even hundreds that turn out to be a nightmare for the home buyer. The low price of foreclosure’s can seem irresistible at first glance. Home buying is a long term decision now, and if you simply look at the price, you can end up in a money pit of repairs with your newly purchased foreclosure. Buyers must carefully read the all documents to ensure you understand risks associated with foreclosure sales. This quite possibly will be the most expensive item you will ever purchase, and your financial future could be at risk.

When you buy a Foreclosure:

• YOU assume 100% of the risk with the foreclosure! This means you can end up spending thousands of dollars in repairs if you didn’t notice some repairs that would be needed, in the panic rush of buying at an auction.
• Bank owned properties are AS-IS! Most homeowners don’t lose their home quickly, it can take months for a bank to foreclose, during that time homeowners typically don’t complete the needed maintenance on their home, leaving it to the new owner to take care of the months of neglect.
• Prior Owner Vandalism is a Real Risk! It’s estimated that more than 65% of homes are vandalized during a foreclosure proceeding. Leaving the repairs up to the new owner. I have personally seen foreclosed homes with NO APPLIANCES, Cooper Pipes torn for the walls, concrete flushed down toilets, windows broken, drywall with holes, and carpeting ripped from the floors. Whether it is the previous homeowner, or transients living in the home during the bank sale, these things can cost tens of thousands of dollars in repairs.

Although there are some great deals to be had in the foreclosure market, there are SO MANY headaches that can come about, usually outweighing the savings in purchase price.

New Homes Magazine will be posting a variety of different experiences, things to consider, and ideas about buying a new home in the coming days.

I would love to hear what you think!